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China aluminum: ADC12 spot offers track weaker primary ingot prices
http://www.chemnet.com Oct 15,2014 Platts
Platts assessed its weekly China domestic ADC12 price at Yuan 14,800-15,300/mt ($2,415-2,497/mt) ex-works Tuesday, compared with Yuan 14,900-15,400/mt two weeks ago.
China was closed October 1-7 for National Day.
Chinese sources added that physical trading had held relatively steady after having warmed up from week-long National Day holiday last week.
"There are demand and inquiries but there's no significant change in the trade after gradual pickup seen after the holiday last week," an east China-based producer said.
Another east China-based producer said domestic offers had dipped on weak demand as credit issues and cash flow problem had continued to haunt companies, thereby affecting their ability to buy material.
The producer said she was not very optimistic of her offers around Yuan 15,000/mt.
"Primary aluminum ingot prices are very weak and this has affected ADC12 offers. Our primary aluminum-fed ADC12 is [Chinese domestic spot aluminum ingot price] plus Yuan 1,500/mt, while market indications for aluminum scrap-fed ADC12 are plus Yuan 300-600/mt," a third east China-based producer who used primary aluminum ingot to produce ADC12 said.
"Traditionally, the period from October to before the Lunar New Year [in February 2015] is a busy period for factories to fulfill their orders. We still have orders on hand but it is not as busy as the previous years," an east China-based diecaster, who bought a small tonnage of ADC12 from a trader around Yuan 15,400/mt, said.
Chinese domestic spot aluminum ingot was priced at Yuan 13,710-13,750/mt Tuesday, compared with Yuan 13,970-14,010/mt last Tuesday, while October aluminum futures stood at Yuan 13,710/mt on the Shanghai Futures Exchange compared with Yuan 13,920/mt last week.
In Japan, the spot import trade stayed fairly thin after a one-day holiday break, despite a stronger yen against the dollar, trading around Yen 107 Tuesday, compared with Yen 108-109 a week ago, industry sources said.
Platts assessed its ADC12 export price assessment at $2,180-2,210/mt FOB China Tuesday compared with $2,180-2,240/mt two weeks ago lower bids and offers heard.
There were no deals reported for Chinese material into Japan as Japanese market participants had just returned from a public holiday though most sources agreed there was a pickup in inquiries.
"I have not received any offers from the Chinese sellers as I have just returned from the holiday," said a Japanese trader, who reckoned that the trade should be a pickup this week due to the stronger yen.
A second Japanese trader, who heard Chinese offers steady at $2,200/mt CFR, said: "There has definitely been pickup in buying interest due to the stronger yen as some Japanese customers are checking and asking."
Several other Japanese sources preferred to adopt a wait-and-see approach as they had bought some material last week.
"Offers from Chinese sellers were at $2,180-2,210/mt CFR Japan this week, unchanged from last week. Although yen has strengthened to 107 today, compared with 108-109 last week, we are maintaining a cautious approach. In fact, we bought some material last week and prefer to 'wait-and-see'," said a third Japanese trader.
A fourth trader, who had bought some material last week, said: "We are not buying anymore this week unless yen falls to 106."
Chinese sources agreed that the current gain in the yen versus dollar was not enticing enough for the Japanese buyers.
"I have seen a pickup in inquiries from Japan due to the stronger yen but the whole market sentiment still feel a bit weak. I have dropped my offers by around $10/mt to $2,220/mt CFR but Japanese traders are asking for $2,180/mt CFR," said an east China-based producer.
Meanwhile, Chinese sources said import offers for Zorba-grade of aluminum scraps had remained below $1,700/mt CIF China as LME prices have remained weak despite a recent rebound.
Chinese producers use imported-aluminum scraps for exporting.
On Monday, the LME official cash price for aluminum was $1,903-1,903.50/mt, compared with $1,897.50-1,898/mt last Monday and $1,913-1,914/mt two weeks ago.
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